Customs Service

Passenger User Fee Needs to Be Reevaluated Gao ID: GGD-95-138 May 22, 1995

The U.S. Customs Service is authorized to charge user fees for processing passengers and conveyances, such as commercial vessels and vehicles, entering the United States. The fee for processing international air and sea passenger arrivals in the United States, called the passenger user fee, is set at $6.50 per passenger. This report (1) determines whether carriers have collected and remitted the fee; (2) assesses any factors that may hamper the collection of this fee, including statutory restrictions, internal control weaknesses, and audit limitations; and (3) identifies options to improve the collection and remittance of the fee.

GAO found that: (1) air and sea carriers collected and remitted to Customs $756.4 million in PUF between July 1986 and the end of fiscal year 1993; (2) some carriers collected PUF but did not remit them, while other carriers did not collect any PUF for certain periods of time; (3) carriers owed about $45 million in PUF from July 1986 to December 1990; (4) Customs' ability to collect PUF is hampered by inconsistencies in collecting and remitting PUF, some carriers' misinterpretations of passenger exemptions, and internal control weaknesses; (5) Customs' ability to identify nonpayment of PUF through compliance audits has limitations, since it can only audit three or four carriers annually and its auditors frequently encounter obstacles while conducting audits; and (6) Customs could require the collection and remittance of PUF at the time and place of arrival, although the feasibility or costs of implementing such an option has not been evaluated.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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